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Water rate increases & EPA fee

The Utilities Committee met on Monday night, March 13, and heard what they termed “uncomfortable news.” The administration determined it was necessary to raise water rates by $2 per ccf (100 cubic feet) plus add a new $2 monthly EPA fee for residents and a $3 fee for commercial. At first it was announced to go into effect immediately with the next monthly bill. After discussion, the new rate and fee would be on hold for one month to provide residents and council members with more detailed information on exactly where this new income would go.

Service director Tony Valerius was the one who informed council and the citizens that due to EPA mandates pertaining to the city’s water plant and the city’s failing distribution system, the administration has unfortunately had to raise the water rates. He said all water rates throughout the city will increase by $2 per ccf. In addition, all residential properties will be assessed a $2 EPA fee, and all commercial properties will be assessed a $3 EPA fee per month. “These new fees will help generate the funds for upgrades to the city’s water plant and distribution lines,” said Valerius.

The service director added that due to the fact that there was such a small carryover from 2015-2016, and because of all the unforeseen EPA mandated upgrades to the water plant, the water fund is in the red. “In order to bring that fund into the positive, the rates had to be raised,” said Valerius. To be clear, he said the current water rate is $5.32 per ccf and it will be $7.32 per unit.

Utilities chair Barb Brady saw a hot spot for her in the increase. She said people inside the city would be paying more than bulk customers outside the city. She said there is already an EPA fee of $4 for the sewer upgrades and each resident pays that now. But, Erie County only pays this fee once because they are bulk customers. Councilman Fred Ostrander looked at his own water bill of six units and computed that his monthly bill would go up $14 plus the new fee. “What’s the $2?” he asked. Councilman Frank Loucka also asked where this fee would go, to distribution or operations? The service director thought it would be split to both, half to repair the distribution lines. Chair Brady said this fee should be kept separate for only EPA mandates. It should not go to salaries or operating.

Councilman Ostrander said just the water rate increase could bring in $800,000 per year or close to $1 million based on approximately 5,000 accounts. Finance director Brian Keller said they wouldn’t be able to collect the full year. He said the fund is not doing well and there are increased costs and personnel. “We’re not covering our repairs,” said Keller. “That’s a huge increase. I’d like to see a list,” said Brady. She asked if the increase was based on real numbers or pulled out of a hat. Mayor Eileen Bulan said they have to get to that level to cover their costs. She said this increase is not up to council. There is no vote. “I don’t want to do this, but there is no choice. We’re not making any money,” said the mayor. “I can vote my unhappiness,” said Brady.

From the audience, Ken Cassell said the city should tell people what this $2 mandatory fee is for. “What are the EPA mandates?” asked Cassell. He advised the city to wait 30 days because the numbers didn’t seem real to him. He wondered how the rates connect with the regional water study and any decision to close the water plant and purchase water from an outside source. Brady said it looked like a 40 percent increase in rates. Ostrander speculated that if they purchase water from outside this increase would be irrelevant.

From the audience, water plant superintendent Eugene Baker said in the past year about $100,000 was spent to address EPA mandates and that was a good number for the coming year. He said they are on track with the EPA and have made great progress. “The EPA is happy with us so far,” said Baker. He said they are able to make these plant upgrades economically. Councilman Jim Forthofer wanted to know what EPA mandates this additional funding would cover. “We should be aware of them.” Mayor Bulan responded they can get this information. “We should be self-sustaining. The longer we put off the increase, the more general fund money that has to go into the water fund.” She added they used the 2012 rate study and did not pull numbers out of a hat. “If we wait 30 days we will just be more in the hole,” said the mayor.

City engineer Lynn Miggins added the new mandate is having the city replace its water mains placed in the early 1900’s. She said they are very old and the newer mains are not performing that well. This replacement will cost $300,000 to $500,000 per year. Miggins said whether the city buys water outside or not, they have to do these water main replacements. “There are too many breaks and they are a threat to our health,” said Miggins. “We face those costs.”
“No one is comfortable with it,” acknowledged the mayor. After the meeting, she and the service director agreed to hold off 30 days.